Update Country Report Maldives 10 Dec 2021

• Many territories in Asia beat EIU's expectations in vaccinating the majority of their population against covid-19 in 2021. The emergence of the Omicron variant is now set to kick-start booster dose programmes.
• Developing Asian countries are at greatest risk of failing to deliver boosters on time. These regions will suffer higher hospitalisation and death rates, affecting their economies, and the coronavirus may mutate in these places in the future.
• Besides vaccines, new pharmaceutical treatments are likely to emerge as an important part of the fight against covid-19. Competition to secure supply is likely to be intense.

Approaching the end of 2021, a large number of territories in Asia have vaccinated more than 60% of their population against covid-19, including almost all developed economies. Many middle- and low-income territories have also exceeded the expectations EIU set out in its projections earlier in 2021 (in January, May and August) to achieve this milestone, serving as positive examples of determination and resourcefulness in the face of the pandemic.

However, current vaccines are unlikely to be as effective against the new Omicron variant of the coronavirus that emerged in November. More research is needed, but initial evidence suggests that this variant is more transmissible but less deadly than existing strains, such as the Delta variant. While there has already been some precautionary re-closing of borders to travellers in response to the new variant, in general we assume that governments in Asia will be very reluctant to walk back the lifting of domestic mobility restrictions enabled by vaccination progress in 2021. A potentially critical factor in their ability to do this, as we explore below, will be the rollout of booster doses to preserve levels of immunity against covid-19 within the population.

Asia has exceeded expectations on vaccine rollout

Despite its status as a developing country, Cambodia stands out in particular as having achieved one of the world's highest levels of vaccination. Almost 80% of the population had been fully vaccinated by the end of November, putting the country behind only Singapore among the member states of the Association of South-East Asian Nations (ASEAN). Cambodia's success can be attributed to its access to large quantities of Chinese vaccines; the enlisting of the armed forces to administer doses; and a concerted push by the government to bring the public on board. Malaysia was another success story, securing supply deals early, using mass vaccination sites and co-ordinating its policy response across government.

Vaccination progress in some regions highlights inequality with those that are lagging. Papua New Guinea, Afghanistan and North Korea are not expected to vaccinate the majority of their population until 2024 or later, if at all. The consequences of vaccine inequality will be serious for the entire region, as the covid-19 virus could mutate into new variants among unvaccinated groups.

A lack of administrative foresight left Bangladesh and Nepal over-reliant on vaccine exports from India, slowing their vaccine rollout amid a de facto ban on these exports over most of 2021. Tumultuous government change in Nepal also exacerbated administrative handicaps. Looking ahead, a resumption of vaccine exports from India will boost these countries' inoculation programmes in 2022. However, there is a risk that India could reimpose its de facto ban to prioritise its domestic booster programme, derailing the vaccination and booster outlook for countries that rely on its supply.

Omicron variant will incentivise governments to deliver booster shots

The emergence of the Omicron variant will create a powerful incentive to receive vaccine booster doses. Boosters can enhance antibodies against covid-19, which drop six months after receiving a dose, according to real-world studies. Failure to deliver boosters within six months of a second dose (or first dose in the case of single-dose vaccines) could result in hospitalisation and death rates increasing again. This could jeopardise fragile economic recoveries, affecting consumer confidence and putting pressure on healthcare systems. We believe that there will now be strong measures to support booster programmes, including the mandating of booster doses in some Asian countries. As at December 8th, the most advanced booster programmes in Asia were in Cambodia, Malaysia, Singapore and South Korea.

We believe that Bhutan, Cambodia, the Maldives, Singapore and Malaysia have the most robust booster vaccine delivery plans in the region, and there is a high likelihood that they will deliver booster doses to their populations within-or even ahead of-the timeline required to preserve immunity levels. These economies will be in an advantageous position when it comes to keeping reopening plans for trade, travel and tourism on track.

We assign a moderate probability to most developed economies in Asia (including Australia, Japan and New Zealand) finishing their booster dose programmes on time. These could be joined by a few notable developing economies, such as China, Malaysia, the Philippines and Thailand. These countries have been slow in kickstarting their booster programmes, which adds an element of risk. However, once their booster schemes are underway, they should be able to deliver to most people within six months of them having been fully vaccinated, based on the time it took them to vaccinate their populations initially.

We assess most developing countries in Asia as probably being unable to administer booster shots to their population within six months of a second dose, rendering them the most vulnerable to a resurgence of covid-19 and increasing the risks to their economic recovery. Some notable developing economies in this category include Bangladesh, Indonesia and Pakistan. These countries have been slow in their vaccine rollouts, and will need more time to finish administering their second doses before they can move on to boosters.

Pharmaceutical treatments for covid-19 offer new hope

Several pharmaceutical treatments for covid-19 are in development and may become available in 2022. Notable examples include two oral antiviral drugs: molnupiravir, which was developed by two US pharmaceutical companies, Merck and Ridgeback Biotherapeutics; and axlovid, developed by another major US pharmaceutical firm, Pfizer. A combination therapy has also been developed by a group of Chinese entities.

If they are passed by regulators, these could be an important tool to keep hospitalisations and deaths low. The drugs' approval would improve the outlook for many economies. While not a replacement for vaccines, drugs may be a relatively cheap and effective complement to immunisation, especially in countries that have used vaccines with relatively low efficacy, or those which are facing delays in their vaccination rollouts. As with vaccines, however, competition to secure supply of such drugs is set to be intense.